Personal finance guru Dave Ramsey says people need an emergency fund of $ 1,000.
He also says if a $ 600 or $ 1,400 stimulus check were a lifeline for you during the current state of emergency, “you’ve been pretty insane.”
The radio host and writer argued against President Joe Biden’s proposed round of stimulus checks when he spoke on Fox News Thursday and told America’s Newsroom that “I don’t believe in stimulus checks.”
“If $ 600 or $ 1400 changes your life, you’ve been pretty insane. You have other problems. ”
“You have a career problem. You have a debt problem. You have a relationship problem. You have a mental health problem, ”he continued. “Something else is going on when $ 600 changes your life.”
He hastened to say that he “didn’t talk to people” – since he was bankrupt himself and helping people who are financially injured every day.
But he argued that government stimulus checks are only throwing money on a problem, rather than fixing the underlying problems.
Or, as he colorfully put it, “pee on a forest fire. It’s absolutely ridiculous. “
Others accused him of ignoring systemic inequalities across the country that were already widening the wealth gap and keeping minorities, women and low-income Americans in poverty before anyone even heard of COVID-19, and which were only exacerbated by a deadly pandemic There are still more than a million applications for unemployment benefit every week.
Before the pandemic, many Americans were already in a precarious financial position. A 2018 Federal Reserve Board report on economic well-being noted this Four in ten Americans could not meet the $ 400 emergency expensesand a CNN report that same year found that One in four Americans had no emergency fund at all.
The novel coronavirus only exacerbated this problem. In fact, Ramsey’s most prolific nugget of personal financial advice – that those who pay off debts keep a $ 1,000 starter emergency fund – is obsolete. Many people struggling to make ends meet have told Reddit that slipping away three to six months of necessary emergency spending long ago expired and that stimulus checks and unemployment benefits were key to getting by to stay afloat.
A lot of people on Twitter compared Ramsey’s “You were pretty crazy” answer to withholding food or water from a dying personsince they were already a goner.
“If you’re already having problems, just throw the whole person away.” wrote one critic.
Ramsey’s proponents argue that he has a point: the country’s underlying financial weaknesses cannot be resolved simply by a few stimulus checks.
Meanwhile, millions of Americans are waiting with bated breath to see if they’ll get it $ 1,400 of stimulus checks as part of President Biden’s proposed $ 1.9 trillion COVID-19 aid package. Most of the people who received $ 1.2 trillion in a direct payment under the CARES Act last year spent those first stimulus checks to pay billsAccording to a YouGov poll.
“It is alarming to see how many Americans have used these funds to keep a roof over their heads and pay for essentials,” the report said.